ON LABOUR AND INCOME
n 1999, 6 out of every 10 families owned a home. The rate of homeownership varied by province. Rate of homeownership I Newfoundland and Labrador had the highest rate (73%) and Quebec the lowest (55%), while Ontario and British Columbia with rates of 60% and 58% Newfoundland and Labrador respectively were close to the national average. New Brunswick Saskatchewan Prince Edward Island Alberta Provincial differences in property taxes Nova Scotia Manitoba Ontario The 1999 Survey of Financial Security (SFS) collected the market value (rather than the assessed value) of Canada homes in May to July 1999 and the property tax paid British Columbia during the calendar year 1998. These charts and tables examine the link between the two at a provin- Quebec cial level. 020406080 The value of a home depends on several factors: size, % location, appreciation in value since acquisition, local demand/supply situation, and price of developed land. Source: Survey of Financial Security, 1999 Therefore, market values will vary not only across provinces but also among localities within a province. A public-use microdata file for the 1999 SFS is avail- able on CD-ROM (13M0006XCB, $2,000). For more information, contact Client Services, Income Statistics Division at 1 888 297-7355; (613) 951-7355; fax: (613) 951-3012; [email protected].
For further information, contact Raj K. Chawla, Labour and Household Surveys Analysis Division. He can be reached at (613) 951-6901 or [email protected].
Statistics Statistique Canada Canada Fact-sheet on property taxes
he owned homes took several forms: single/ detached (with or without adjoining land in the Homeowning families by type of property Tcase of farm families), double/semi-detached, row/terrace, duplex, apartment, or mobile home in a Double/ trailer park. The majority of homeowning families Single/ semi- Row/ lived in a single detached home, the proportion detached detached terrace Duplex Other varying from 93% in Manitoba to 73% in British % Columbia. For Ontario and Quebec, the proportions Canada 79.5 5.2 4.3 3.4 7.6 were 80% and 74% respectively. The second largest Newfoundland and group in Ontario were owners of double/semi- Labrador 88.9 2.2 1.8 4.4 2.7 detached homes (8%). Second place in Newfound- Prince Edward land and Labrador was held by duplex owners (4%), Island 88.6 0.7 0.0 1.9 8.7 and in the remaining provinces by owners of ‘other’ Nova Scotia 87.9 2.8 0.6 2.1 6.6 structures. New Brunswick 86.0 0.8 0.8 1.6 10.8 Quebec 73.8 6.3 2.7 8.4 8.8 Ontario 80.5 7.9 5.1 1.5 5.0 Manitoba 92.5 1.8 1.4 0.7 3.7 Saskatchewan 91.5 0.5 1.5 0.8 5.8 Alberta 82.0 2.5 5.8 1.7 8.0 British Columbia 72.8 2.4 7.4 3.0 14.4
Source: Survey of Financial Security, 1999
verall, families in single/detached homes paid Share of total property taxes paid by owners of the bulk (81%) of the total $12.6 billion paid single/detached homes Ofor property taxes in 1998. The rate was over 90% in Prince Edward Island, Saskatchewan and Manitoba; and between 82% and 88% in Newfound- Prince Edward Island land and Labrador, Nova Scotia, New Brunswick, Saskatchewan Ontario, Alberta and British Columbia. Owners of Manitoba single/detached homes in Quebec, on the other hand, New Brunswick contributed only 69% of the total property tax in that Alberta province. Nova Scotia Newfoundland and Labrador Ontario British Columbia Canada Quebec 0 20406080100 %
Source: Survey of Financial Security, 1999
PERSPECTIVES ON LABOUR AND INCOME 2 Statistics Canada Fact-sheet on property taxes
n 1998, homeowning families with a single/ detached home in Ontario paid the highest Average property tax by type of property Iproperty tax ($2,319) while those in Newfound- land and Labrador paid the lowest ($611). Some of Double/ the interprovincial variation can be attributed to Single/ semi- Row/ differences in the urban-rural mix and the value of detached detached terrace Duplex Other homes across Canada. $ Canada 1,861 1,999 1,494 2,455 1,361 Newfoundland and Labrador 611 675 636 1,367 349 Prince Edward Island 1,073 1,025 0 925 388 Nova Scotia 956 745 980 3,830 559 New Brunswick 922 2,468 1,032 1,433 497 Quebec 1,898 2,220 2,083 2,903 2,120 Ontario 2,319 1,992 1,793 1,889 1,699 Manitoba 1,786 1,474 760 1,842 1,880 Saskatchewan 1,517 2,961 2,271 1,086 691 Alberta 1,456 1,896 852 1,274 810 British Columbia 1,605 1,609 972 1,696 721
Source: Survey of Financial Security, 1999
he urban-rural split of homeowning families Homeowning families in urban and rural areas shows considerable variation by province. In T Ontario, Alberta and British Columbia, between 83% and 88% of all families were living in Alberta urban areas, compared with around 50% in Prince Ontario Edward Island, Nova Scotia and New Brunswick. British Columbia Overall, 79% of Canadian families were living in Canada urban areas in 1999. Manitoba Quebec Saskatchewan Newfoundland and Labrador Prince Edward Island Nova Scotia New Brunswick 0 20406080100 % Urban Rural
Source: Survey of Financial Security, 1999
PERSPECTIVES ON LABOUR AND INCOME 3 Statistics Canada Fact-sheet on property taxes
rrespective of province, families in urban areas paid more in property taxes than their counterparts in Average property taxes in urban and rural areas Ithe rural areas. The differences were more pro- nounced in some provinces than in others. Although families in urban areas of Quebec and Ontario paid Ontario on average almost the same (around $2,300), those in Quebec rural areas paid quite different amounts ($1,362 in Canada Quebec; $1,952 in Ontario). Across Canada, the Manitoba average amount paid by urban families ranged from Saskatchewan $758 in Newfoundland and Labrador to $2,281 in Ontario. The amount paid by rural families ranged British Columbia from $416 and $1,952 for the same provinces. The Alberta range of mean property taxes paid by urban and rural Nova Scotia families was almost the same across Canada. Prince Edward Island Urban Rural New Brunswick Newfoundland and Labrador 0 500 1,000 1,500 2,000 2,500 $
Source: Survey of Financial Security, 1999
family with no or low income does not pay income tax. However, any family that owns a Families paying property tax but no income tax Ahome must pay property tax. The proportion of families who paid property tax but no income tax was higher in the Atlantic provinces (ranging from Newfoundland and Labrador 16.4% in Newfoundland and Labrador to 11.2% in New Brunswick Prince Edward Island) than in the Prairies (from 9.5% Nova Scotia in Manitoba to 7.8% for Alberta). The proportion in Prince Edward Island Ontario was just over 5%. Manitoba Families who paid property tax but no income tax Saskatchewan were mostly elderly. The average age of the major British Columbia income recipient in these families varied between 58 Quebec and 68 years across provinces. In families paying both Canada kinds of tax, the average age ranged from 48 to 51. Alberta Ontario 0 5 10 15 20 %
Source: Survey of Financial Security, 1999
PERSPECTIVES ON LABOUR AND INCOME 4 Statistics Canada Fact-sheet on property taxes
Average property taxes by value of property
$ 5,000
Under $50,000 $50,000 to $99,999 4,000 $100,000 to $149,999 $150,000 to $199,999 $200,000 and over 3,000
2,000
1,000
0,000 Canada Nfld. P.E.I. N.S. N.B. Que. Ont. Man. Sask. Alta. B.C. Lab.
Source: Survey of Financial Security, 1999
n all provinces, the average tax paid rose as the worth between $100,000 and $149,999 paid between value of the home increased, although the $933 and $2,245. For homes $200,000 and over, the Iincremental tax increases with respect to home range was between $1,660 and $4,691. For a given values were somewhat different. For example, in New market value group, families in Manitoba and Quebec Brunswick, families with homes worth $200,000 and paid the highest taxes. over paid 6.3 times the tax paid by those with homes Families in British Columbia with high-priced homes valued under $50,000, compared with 5.1 in (69% of all families owned homes worth $200,000 Manitoba and 3.4 in both Ontario and Alberta. and over) did not necessarily pay higher property taxes. Evidently, families owning homes of equal market The average amount paid by these families was value were paying different amounts of property tax $1,957—fairly close to the $1,660 paid by similar fami- across the provinces. To illustrate, families with homes lies in Newfoundland and Labrador. Similarly priced valued under $50,000 paid, on average, property taxes homes in Ontario and Alberta, on the other hand, had ranging between $344 and $926. Those with homes tax bills of $3,111 and $2,526 respectively.
These tables and charts complement the article “Property taxes” in this issue. For definitions and a description of the data source, see the article.
PERSPECTIVES ON LABOUR AND INCOME 5 Statistics Canada Fact-sheet on property taxes
The ratio of average property tax to market value of home
Property tax as % of property value 3.0
Under $50,000 $50,000 to $99,999 $100,000 to $149,999 $150,000 to $199,999 2.0 $200,000 and over
1.0
0.0 Canada Nfld. P.E.I. N.S. N.B. Que. Ont. Man. Sask. Alta. B.C. Lab.
Source: Survey of Financial Security, 1999
he ratio of average property tax to market property taxes are regressive in relation to home value of home is another indicator that can be values. The ratio ranged between 1.15 and 2.92 for T used for interprovincial comparisons of families with homes worth under $50,000, and property taxes. In almost all instances, the ratio between 0.72 and 1.66 for those with homes priced at declines as the market value increases, indicating that $200,000 and over.
omeowning families paying property tax Property tax paid by payers and non-payers of but no income tax in 1998 spent a larger income tax H proportion of their income on property tax than families paying both property tax and income tax. In Ontario and Quebec, property tax was 10% of Ontario Quebec income for families paying only property tax com- Canada pared with about 3% for families paying both taxes. Manitoba In Newfoundland and Labrador, the proportions British Columbia were 2.5% and 1.3%. Alberta The average income of families who paid only prop- Saskatchewan erty tax ranged from $16,000 to $18,000 across the New Brunswick Property tax only provinces compared with $52,500 to $73,400 for Prince Edward Island Property and those who paid both taxes. Families paying only prop- Nova Scotia income taxes Newfoundland and Labrador erty tax were most likely elderly with low incomes. 0 5 10 15 % of income
Source: Survey of Financial Security, 1999
PERSPECTIVES ON LABOUR AND INCOME 6 Statistics Canada Fact-sheet on property taxes
f the total difference in average property taxes Decomposition of the difference in average paid in 1998 by families in Newfoundland property tax paid by province relative to Oand Labrador and in Ontario, 24% was due Ontario, 1998 to the difference in effective tax rates and the remain- ing 76% to the difference in market values of homes; Percentage decomposition due to: the corresponding proportions for Alberta were 39% Market value Effective and 61%. On the other hand, the difference in the of home tax rate average taxes paid by families in Ontario and those in % Quebec, Manitoba, or Saskatchewan was much more attributable to the difference in market values of Newfoundland and Labrador 76.1 23.9 homes, whereas the difference in their effective tax Prince Edward Island 85.9 14.1 rates had a more modifying and compensatory effect. Nova Scotia 90.7 9.3 However, the reverse was true in the case of British New Brunswick 91.9 8.1 Columbia and Ontario where the difference in Quebec 546.6 -446.6 effective tax rates (proxied as mill rates) was more Ontario … … pronounced. Manitoba 297.6 -197.6 Saskatchewan 191.3 -91.3 Alberta 61.3 38.7 British Columbia -40.3 140.3
Source: Survey of Financial Security, 1999
ince property taxes and values of owner- occupied homes are strongly associated, and Gini coefficients of market values of owner- S since this association varies within a province, it occupied homes and property taxes by may be interesting to see how unequally property taxes province and market values of homes are distributed within each province. Does the province with the most unequally Values of Property homes taxes Ratio distributed market values of homes show the most (G1) (G2) (G2/G1) unequal distribution of property taxes as well? % In each province, property taxes were more unequally Newfoundland and Labrador 0.333 0.403 1.21 distributed than market values of owner-occupied Prince Edward Island 0.286 0.388 1.36 homes. The highest gap (38%) occurred in Nova Nova Scotia 0.299 0.412 1.38 Scotia, the lowest (9%) in British Columbia. For fami- New Brunswick 0.278 0.363 1.31 lies in Ontario, the gap amounted to 10%—much Quebec 0.288 0.326 1.13 closer to that experienced by their counterparts in Ontario 0.281 0.308 1.10 British Columbia. Manitoba 0.280 0.364 1.30 Saskatchewan 0.340 0.397 1.17 Alberta 0.276 0.379 1.38 British Columbia 0.324 0.352 1.09
Source: Survey of Financial Security, 1999
Perspectives
PERSPECTIVES ON LABOUR AND INCOME 7 Statistics Canada